He would have had absolutely no way to win back what he had lost. By contrast, when the wager comes from both sides—as was actually the case—the defeated party still hopes to recover his stake and therefore presses for a rematch.
The point, then, is that had the pledge come from one side only—Rukānah’s—there would have been no benefit for him in returning after his loss: he would either forfeit a second and a third sheep along with the first, or the first would remain the Prophet’s ﷺ. It is evident that Rukānah never intended such an arrangement, nor would anyone else who competes; the loser’s sole purpose in returning is to win back what he has paid out, and more besides.
This report thus indicates the permissibility of mutual wagering, without a muhallil, in any contest that champions the truth, raises its banners, and affirms the Messenger—may Allah bless him and grant him peace.
The ruling differs, however, for an activity that is hateful and detestable to Allah and His Messenger, one that diverts people from His remembrance; in such a case it remains impermissible even when a prize is offered (1).
According to one of the two opinions in the schools of al-Shāfiʿī and Aḥmad, this is perfectly clear (2), for they allow competitions with prizes for birds trained to carry intelligence from which the Muslims benefit.
This was reported by Abū’l-Ḥasan al-Āmidī and by the author of al-Mustawʿab on the authority of some